Mary Jo White to step down as chief of the Securities and Exchange Commission

Wall Street regulators began an exodus from Washington on Monday as Mary Jo White, the chairwoman of the Securities and Exchange Commission, announced plans to leave the agency.

The decision makes White, a former federal prosecutor who has served more than two decades in the federal government, the first major Obama administration appointee to step down after Donald Trump's upset victory last week. Other financial regulators are expected to follow suit in the coming weeks.

The election of Trump is a game-changer for the SEC — and for that matter, all financial agencies.

White was expected to leave no matter the outcome of the election. But many Democrats had hoped that if Hillary Clinton won, she would choose a strong proponent of regulation to succeed White, whose policies often reflected a political middle ground. Now, the agency is almost certain to be pushed in the opposite direction.

Trump has vowed to dismantle Dodd-Frank, the financial regulatory overhaul Congress passed in response to the 2008 financial crisis. And although Dodd-Frank will more likely be watered down than repealed, his appointments will no doubt shift the tone and priorities across financial regulatory agencies.

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The president-elect's biggest move on Wall Street could be his choice for Treasury secretary. Trump's short list is said to include Steven Mnuchin, an investment manager and former Goldman Sachs partner who was Trump's campaign finance chairman, and Rep. Jeb Hensarling, R-Texas, the chairman of the House Financial Services Committee.

Hensarling is still being considered, in part because of pressure from Congress, but Mnuchin is the favorite among Trump's Wall Street backers, according to someone with direct knowledge but who was not authorized to speak publicly. A decision is expected within about 10 days.

Either way, the Trump Treasury Department might rein in the Financial Stability Oversight Council, a collection of regulators who examine financial risks and designate companies as systemically important. The Treasury secretary is chairman of the council and could effectively defang it, according to Ian Katz, a policy analyst at Capital Alpha who predicted that the council might essentially become "a quarterly kaffeeklatsch."

Trump was elected at a pivotal time for the SEC, an agency that had already turned a corner under White. Unlike Mary L. Schapiro, who inherited a scandal-plagued SEC after the financial crisis, White needed not to save the agency, but to modernize it, a task that the next administration also will face.

White's departure, which will take effect at the end of the Obama administration in January, will set off speculation about whom the president-elect will select to succeed her. Although such discussions have barely begun, the field of potential contenders could include Michael S. Piwowar, a Republican commissioner at the agency.

Paul S. Atkins, a former SEC Republican commissioner who has advocated deregulatory policies, is leading Trump's effort to select a new chair for the agency and could be a candidate. Anthony Scaramucci, a hedge fund manager who supported Trump's candidacy, is also advising the transition team.

"As the head of the SEC you've got to get back into reffing the game properly and end the demonization of Wall Street," Scaramucci said in an interview last week before his appointment to Trump's transition team.

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As more of President Barack Obama's financial regulators step down, the firewall around his Wall Street legacy will start to crumble. Timothy Massad, the chairman of the Commodity Futures Trading Commission, is expected to step down by early next year, though he could briefly remain at the agency as a Democratic commissioner.

An even bigger change could occur at the banking regulators — the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency — which became a thorn in the side of Wall Street under Obama. Martin J. Gruenberg and Thomas Curry, the leaders of the FDIC and OCC, will probably leave office next year when their terms expire, or possibly even sooner.

Daniel Tarullo, the Federal Reserve governor who oversees many of the central bank's regulatory efforts and has led a charge to change the culture on Wall Street, is not expected to serve out his term through early 2022. He could leave early next year, which would deliver a blow to proponents of Wall Street regulation.

With turnover at the SEC, White's legacy could be in jeopardy as well.

She oversaw a record number of enforcement actions and directed a rapid pace of rule-writing based not only on Dodd-Frank, but on regulations of her own making. Those initiatives were aimed at improving money market fund regulation and the broader asset management industry.

"I think what we've done so far has been quite transformative and really modernized that core responsibility," White said in a recent interview.

Yet White has not completed more than a dozen rules, nor has she formalized a plan to require that financial advisers act in their client's best interests. Now that these initiatives will fall into the hands of a Republican chairman, they may come off the agenda.

As it was, White, a political independent, drew criticism from liberal lawmakers who view her as the quintessential moderate. Sen. Elizabeth Warren, D-Mass., who channels the populist outrage over Wall Street excess, even called on Obama to designate a new SEC leader because the agency had not required companies to disclose political contributions.

In her first public remarks on the subject, White said in an interview that the criticism "really does come with the territory."

"I think I'm a very constructive recipient of constructive criticism," she said, adding: "It's not like you like people to beat on your head, whoever they are, however baseless it is."

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Before the SEC, White was the first woman to become U.S. attorney in Manhattan, one of the most apolitical jobs in government. Earning a reputation as a tenacious prosecutor with an independent streak, White embraced the joke that her office was the U.S. attorney for the "sovereign," rather than Southern, district of New York.

"She's not motivated by any special interest," said Preet Bharara, a prosecutor under White who is now the U.S. attorney in Manhattan. "People may disagree from time to time, and, in fact, in any high stakes environment, it would be unnatural if there weren't disagreement from special interests and adversaries. But she's hypersmart and makes a decision immune from any political wind or political criticism, and I think that's a good way to be."

White's prosecutorial experience — she supervised the original investigation into Osama bin Laden — raised expectations for her enforcement agenda at the SEC.

In its last fiscal year, the agency brought a record 548 stand-alone enforcement actions. In conjunction with Andrew J. Ceresney, the agency's enforcement director, White reversed the SEC's long-standing yet unofficial policy of allowing companies to neither admit nor deny wrongdoing. Seventy-three such admissions have been made since.

Other "firsts" occurred under White and Ceresney: the first action against a major ratings firm, Standard & Poor's, and the first action against a company, KBR Inc., for inserting overly restrictive confidentiality agreements that could stifle whistleblowers. Some of the agency's most novel cases came against private equity firms that failed to disclose fees and conflicts of interest.

White is known for keeping a workaholic's schedule. Colleagues said it was common for her to hold a 9 p.m. Sunday conference call, before dispatching middle-of-the night emails and placing a 5:30 a.m. call to senior staff.

But she also promoted staff morale by holding coffee and doughnut sessions. Every holiday season, she would give a party for her staff at Rosa Mexicano restaurant, where she would hand out gifts to her aides' children.

White, a partial New York Yankees season-ticket holder whose favorite moment as SEC chairwoman came when throwing out the first pitch at a Washington Nationals game, said her dream job would be the first female baseball commissioner.

"I really don't think about what I'm doing next until I'm done," she said, except, "If you have baseball commissioner to offer me, then I can tell you what my plans are."